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| MP15033 |
| MAPS PET FOOD PRODUCTS June 2003 |
| Overview |
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This report covers: pet food, pets, dog food, cat
food,
Companies covered include: AJM Pet
Products, Arden Grange, Armitage, Burgess, Butcher's, Capern, Denes, Hills Pet
Nutrition, IAMS, Masterfoods, Nestlé Purina, Pero, Supreme, Tetra UK,
Wagg Foods, Ancol Pet Products, Armitage Brothers, Masterfoods, Nestlé
Purina Petcare (UK), Petplan, Pets At Home,
| Executive Summary 6 |
| 1. Introduction 7 |
| DEFINITIONS 7 |
| Pet Food 7 |
| Pet Accessories 7 |
| Pet Insurance 8 |
| 2. Strategic Overview 9 |
| MARKET DYNAMICS AND SEGMENTATION 9 |
| Background Factors 9 |
| Table 1: Trends in Pet Ownership (million and index 1998=100), 1998-2002 9 |
| Figure 1: Trends in Pet Ownership (million), 1998-2002 10 |
| Table 2: UK Population of Pets (million), 2000 and 2001 10 |
| Market Size and Segmentation 11 |
| Table 3: The UK Pet Market by Sector by Value (£m at rsp and index 1998=100), 1998-2002 12 |
| Table 4: The UK Pet Market by Sector by Market Share ( percent), 1998-2002 13 |
| COMPETITIVE STRUCTURE 13 |
| DISTRIBUTION 14 |
| THE CONSUMER 14 |
| Table 5: Pet Ownership ( percent of adults), February 2003 15 |
| Table 6: Profile of Pet Owners ( percent of adults), February 2003 16 |
| 3. Pet Food 17 |
| BACKGROUND 17 |
| MARKET SIZE 17 |
| Table 7: The UK Market for Pet Food by Sector by Value (£m at rsp and index 1998=100), 1998-2002 17 |
| Figure 2: The UK Market for Pet Food by Sector by Value (£m at rsp), 1998-2002 18 |
| SEGMENTATION 19 |
| Cat and Dog Foods 19 |
| Moist and Semi-Moist 19 |
| Dry 19 |
| Treats 20 |
| Table 8: The UK Dog Food Market by Sector Share ( percent), 2000-2002 20 |
| Table 9: The UK Cat Food Market by Sector Share ( percent), 2000-2002 21 |
| Other Pet Food 21 |
| COMPETITIVE STRUCTURE 22 |
| Selected UK Pet Food Suppliers and Brands 22 |
| AJM Pet Products 22 |
| Arden Grange 22 |
| Armitage 23 |
| Burgess 23 |
| Butcher's 23 |
| Capern 23 |
| Denes 23 |
| Hills Pet Nutrition 23 |
| IAMS 23 |
| Masterfoods 23 |
| Nestlé Purina 24 |
| Pero 24 |
| Supreme 24 |
| Tetra UK 24 |
| Wagg Foods 24 |
| MARKETING AND ADVERTISING 24 |
| Table 10: Main Media Advertising Expenditure on Dog Food (£000), Year Ending December 2002 25 |
| Table 11: Main Media Advertising Expenditure on Cat Food (£000), Year Ending December 2002 26 |
| RECENT DEVELOPMENTS 28 |
| DISTRIBUTION 28 |
| Table 12: Retail Sales of Pet Food by Type of Outlet by Value ( percent), 2002 28 |
| Figure 3: Retail Sales of Pet Food by Type of Outlet by Value ( percent), 2002 29 |
| 4. Pet Accessories 30 |
| BACKGROUND 30 |
| MARKET SIZE 30 |
| Table 13: The UK Market for Pet Accessories by Value (£m at rsp and index 1998=100), 1998-2002 30 |
| Figure 4: The UK Market for Pet Accessories by Value (£m at rsp), 1998-2002 31 |
| MARKET SEGMENTATION 31 |
| Pet Toys 31 |
| Pet Housing and Bedding 32 |
| Grooming and Hygiene Equipment 32 |
| Pet Restraints 32 |
| Feeding Utensils 32 |
| Miscellaneous Accessories 32 |
| Table 14: The UK Market for Pet Accessories by Type by Value and Market Share (£m and percent), 1999 and 2002 33 |
| COMPETITIVE STRUCTURE 33 |
| Table 15: Selected UK Pet Accessory Suppliers and Brands, 2002 34 |
| MARKETING AND ADVERTISING 35 |
| RECENT DEVELOPMENTS 35 |
| CONSUMER TRENDS 35 |
| DISTRIBUTION 36 |
| 5. Pet Insurance 37 |
| BACKGROUND 37 |
| MARKET SIZE 37 |
| Table 16: The UK Market for Pet Insurance by Value (£m at rsp and index 1998=100), 1998-2002 37 |
| Figure 5: The UK Market for Pet Insurance by Value (£m at rsp), 1998-2002 38 |
| SEGMENTATION 38 |
| MARKETING AND ADVERTISING 38 |
| Table 17: Main Media Advertising Expenditure on Pet Insurance (£000), Year Ending December 2002 39 |
| SUPPLIERS 39 |
| DISTRIBUTION 40 |
| 6. An International Perspective 41 |
| OVERVIEW 41 |
| EUROPE 41 |
| Recent Developments 41 |
| US 41 |
| Recent Developments 42 |
| Procter & Gamble versus Colgate-Palmolive 42 |
| 7. PEST Analysis 43 |
| POLITICAL FACTORS 43 |
| ECONOMIC FACTORS 43 |
| SOCIAL FACTORS 44 |
| TECHNOLOGICAL FACTORS 44 |
| 8. Consumer Dynamics 45 |
| OVERVIEW 45 |
| Table 18: Overview of Attitudes Towards Pet Food, Pet Accessories and Pet Insurance ( percent of adults), 2003 46 |
| BUYING PET FOOD 47 |
| S1: "I am happy to spend a bit extra on food for my pet to make sure it provides all the nutrients it needs." 47 |
| S2: "I look for competitive prices and special offers when buying food for my pet." 47 |
| S3: "I buy only the cheapest possible food for my pet." 47 |
| Table 19: Attitudes Towards Buying Food for Pets ( percent of adults), February 2003 48 |
| ATTITUDES TOwards PET RETAILERS 50 |
| S4: "It is important that pet retailers offer a wide range of accessories and choice of brands/types." 50 |
| S5: "It is important that pet retailers are able to offer expert advice on all aspects of pet ownership and the most suitable products to buy." 50 |
| Table 20: Attitudes Towards Pet Retailers ( percent of adults), February 2003 50 |
| ATTITUDES TOWARDS BUYING PET ACCESSORIES 52 |
| S6: "I only buy pet accessories when absolutely necessary, e.g. if a feeding bowl breaks or lead snaps." 52 |
| S7: "I regularly (at least twice a year) purchase items such as toys for my pet(s)." 52 |
| S8: "I have not bought anything for my pet(s), apart from food, in the past year." 52 |
| Table 21: Attitudes Towards Buying Pet Accessories ( percent of adults), February 2003 53 |
| PURCHASING PREFERENCES 54 |
| S9: "In the past year I have purchased pet accessories (e.g. toys, leads, beds, etc.) from the supermarket at the same time as purchasing other groceries and pet food." 54 |
| S10: "In the past year I have purchased pet accessories from a high street pet shop or the vet." 54 |
| Table 22: Purchasing From Supermarkets and High Street Pet Shops/Vets ( percent of adults), February 2003 55 |
| S11: "In the past year I have purchased pet accessories (e.g. toys, leads, beds, etc.) from a large pet superstore." 56 |
| S12:"I have bought/would consider buying pet accessories by mail order or through the Internet." 57 |
| Table 23: Purchasing From Large Pet Superstores and by Mail Order or the Internet ( percent of adults), February 2003 57 |
| PET INSURANCE 59 |
| S13: "Pet insurance is too expensive and a waste of money." 59 |
| S14: "I have taken out pet insurance for my dog or cat." 59 |
| S15: "I am considering taking out pet insurance in the future." 59 |
| Table 24: Attitudes Towards Pet Insurance ( percent of adults), February 2003 60 |
| Table 25: Profiles of Those Who Have or Are Considering Pet Insurance ( percent of adults), February 2003 62 |
| 9. Company Profiles 64 |
| ANCOL PET PRODUCTS LTD 64 |
| Corporate Strategy 64 |
| Recent Developments 64 |
| Profitability 64 |
| Table 26: Financial Results for Ancol Pet Products Ltd (£000), Years Ending 31st December 1999-2001 64 |
| ARMITAGE BROTHERS PLC 65 |
| Corporate Strategy 65 |
| Recent Developments 65 |
| Profitability 65 |
| Table 27: Financial Results for Armitage Brothers PLC (£000), Years Ending 28th May 2000, 27th May 2001 and 6th June 2002 65 |
| MASTERFOODS 66 |
| Corporate Strategy 66 |
| Recent Developments 66 |
| Marketing and Advertising 66 |
| Profitability 67 |
| Nestlé PURINA PETCARE (UK) LTD 67 |
| Corporate Strategy 67 |
| Recent Developments 67 |
| Profitability 67 |
| Table 28: Financial Results for Nestlé Purina Petcare (UK) Ltd (£000), Years Ending 31st December 1999-2001 68 |
| PETPLAN LIMITED 68 |
| Corporate Strategy 68 |
| Recent Developments 68 |
| Profitability 69 |
| Table 29: Financial Results for Petplan Ltd (£000), Years Ending 31st December 1999-2001 69 |
| PETS AT HOME 69 |
| Corporate Strategy 69 |
| Recent Developments 69 |
| Profitability 69 |
| Table 30: Financial Results for Pets at Home (£000), Years Ending 30th March 2000, 29th March 2001 and 28th March 2002 70 |
| 10. The Future 71 |
| DEVELOPMENTS 71 |
| FORECASTS 72 |
| Table 31: The Forecast UK Pet Products Market by Sector by Value (£m at rsp and index 2003=100), 2003-2007 73 |
| 11. Further Sources 74 |
| Associations 74 |
| Publications 74 |
| General Sources 74 |
| Bonnier Information Sources 75 |
| Other Sources 76 |
| The pet market is mature, with growth coming mainly from product innovation by manufacturers. Pet ownership has remained relatively static over the past 5 years, but dog ownership has fallen more than cat ownership. This has had a number of effects on the market, including falling volumes in pet foods as dogs tend to eat more than cats but rising values, partly because cats tend to be fussier eaters than dogs and may need to be `tempted' by premium pet food. The lower ownership of dogs has also had something of a limiting effect on the pet accessories market. |
| Other influences on the market include busier lifestyles, meaning that pet owners may be out of the house for long periods, leading to both an increased purchasing of pet toys to keep animals occupied while the owner is not there and a growing emphasis on convenience in terms of pet food packaging and formulation. There is also a trend towards the `humanisation' of pets, which are increasingly being treated as family members, with owners being more prepared to spend money on keeping them healthy and happy. Greater health-consciousness and knowledge among consumers in general extends to their desire to give pets the right nutrients for their particular needs, while better veterinary care has meant that pets live longer, leading to the development of a number of products specifically for older dogs and cats. |
| The overall market for pet food has seen steady growth, with cat food sales growing more strongly than those for dog food. The pet accessories market has also seen steady, rather than spectacular, growth. Factors that have contributed to market growth, such as a growing tendency for owners to indulge their pets and the expansion of pet superstores (which has helped turn shopping for pets into a leisure outing), have been offset by the fact that the dog population is falling. The UK market for pet insurance has shown strong growth, albeit from a small base; this has been aided by increased veterinary costs, coupled with the availability of more sophisticated treatments, so that previously undetected conditions can now be treated. |
| The pet food market is becoming increasingly global in nature, with the UK market dominated by two large multinationals Masterfoods and Nestlé Purina. The accessories market is more fragmented, with a large number of products and brands being supplied by a wide variety of companies. Pet insurance is provided by specialist companies, more general insurance companies and by some multiple retailers, including Tesco and Sainsbury's, with Marks & Spencer entering the market during 2002. There is some overlap of suppliers in different sectors of the market. |
| Key Note's original consumer research revealed that the vast majority of pet owners (87 percent) are prepared to spend extra on food for their pet as long as it provides all the required nutrients, although they are also keen on competitive prices and special offers (57 percent). More than half (53 percent) say that they purchase accessories for their pets at least twice a year, and relatively few (13 percent) have bought nothing but food for their pet during the past year. Just under one in five (19 percent) pet owners have pet insurance, with the same proportion saying they are considering obtaining it |
Text © 2003MAPS
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Last updated by Amanda Porteous July 2003